Dave’s main result is that there were a total of 135 gold events and 869 silver events where the price moved up or down more than 0.5% within a minute, with 66% of the gold events, and 54% of the silver, being downward moves. While the data shows a bias to the downside, Dave doesn’t put any of the results into context, undermining I think what is a worthwhile analytical approach.

Dave’s data set includes every 1 minute period between 4pm-3am US Eastern Time from late 2009. That is an 11 hour trading window over 6 years. The number of 1 minute periods in the data set is therefore:

A total of 135 gold events within 990,000 periods is 0.0136%, or 1 event per 7,333 periods. For silver it is 0.087%. That is not a lot of manipulation events and in the case of gold, Dave shows that oil, gas, wheat and corn had more events.

Dave’s other observation is that when you compare the aggregate dollar change over all manipulation events and express them as a percentage of price, gold and silver have much bigger price effects (-33% and -120%, respectively), compared to a few percent for the other contracts investigated.

However, I see two problems with this comparison. Firstly, the total dollar changes are just compared to current spot price. A $10 change on $1000 is not the same as a $10 change when the gold price was $1900. It would been more informative to have added all the percentage changes for the manipulation events so that apples were being compared to apples, in terms of price impact at the time.

Secondly, just as with the 990,000 period example, a 4% total change for Crude Oil may not be directly comparable to -33% for Gold as the normal volatility for gold and oil differ. Having a total dollar change up and down over the other 989,865 non-manipulation events would reveal the real impact these events had for the overall price change for gold and silver within the time period investigated. Given that the average gold price over the time period is well above $1150 I’d say that -33% may be overstating the case.

The other aspect of the analysis that I think can be queried is the choice of trading window, which is explained thus:

“Most goldbugs like to say that gold and silver suppression attacks occur in the “wee hours of the morning.” Loosely translated, I take this to mean during non-US and non-London trading hours. So that’s the time range I will use: 4pm-3am Eastern; from just after US market close through to the London market open.”

If it wasn’t for the fact that Comex and London do trade significant volumes, I’d say this was a US-centric “we are sleeping so it doesn’t matter” view. However, do not those same “goldbugs” proclaim that US and UK trading is all paper, compared to the “real” physical markets in Asia, using charts like this to prove their point:

Below is a table of the key gold trading hubs and their usual trading hours. The highlighted areas are when those countries are operating their trading exchanges.

To argue that 4pm-3am is “when activity is relatively lighter than usual” is to argue that the huge physical markets of China, India, Japan and Dubai don’t matter when it comes to gold and silver prices. By the way, Perth is in the same time zone as China, which means the 300-400 tonnes of gold we trade each year must also not matter.

From the table above you can see that all of the major Asian markets close down their overnight electronic platforms around 3pm New York. This is not coincidental, as that is when CME’s Globex is winding down. I would argue that a more realistic period during which the global precious metal markets are relatively illiquid would be from Globex close at 5pm (New York time) to 9pm when the SGE opens, and maybe 2:30am to 5:00am, between the China/Japan break and the setting of the AM London Price.

I have left a comment on the Peak Prosperity article asking Dave to re-run his program with a change to the trading window and accumulating percentage changes for all manipulation events as well as all 990,000 periods. Hopefully he will indulge. It would also be interesting to see the analysis run for the entire 24 hour window, to get an overall sense of potential manipulation events.

Freda Peeple

It doesn’t matter; none of it does. Just Keep Stackin

You know it makes sense.

joey

The thought these newly built super computer trading platforms sleep overnight is total lunacy. One bank is linked to the next and the next working overtime 24/7 and at any time one could collapse sending them all to the floor like dominoes, possibly via their QUADRILLION Dollar Derivative exposure.

That Other Guy

oh, come on now! TWO quadrillion at least! Or more than one could collapse. Or Space Monkeys might invade. Or Silver might coil and coil and coil and coil and then skyrocket to da Moon

You’re missing the point and yes the amount of possible events are becoming many.
The point is there is no given place or time to this manipulation. It happens anywhere at anytime.
And who’s to say it won’t? What’s the probability?

That Other Guy

oh, ok, now I get you – sorry for that lapse; I got distracted by that Lennonist Commie with the rose-tinted spectacles

so we know for sure it’s manipulation, the only thing we haven’t quite pinned down yet is just when its happening. it can’t be all the time, surely, because sometimes the price goes up, and that can never ever be manipulation, just “price emancipation”

do you think it really is TPTB who are doing it, or just TPTBAAAAATT?

joey

Apologies accepted. You sound a lot like Shavi?
Prices are manipulated in both directions up and down,you know this and the same spiel came from shave the other week as did emancipation.

As for David Bowie? lol, I was playing that tune 6 months ago.
enjoy your evening

when of course nothing flowed anywhere and the “stores of bullion” remained unchanged; there is clearly some form of cognitive disconnect going on here, where information which runs contrary to the preconceived “West to East” meme is ignored and an absence of any new information is interpreted as confirmation of that trend

Sir Vadgalot

OK – this is getting silly

B>ANOTHER 97,000 oz of Gold has just entered the COMEX Kilobar inventory and nobody has commented on it

b) it’s not as if one of their deviously inscrutable Sino-Belgian Customers smuggled it into Brinks and then secretly booked it to them, because if ownership moved from a Brinks’s client to a Bank such as e.g. HSBC or JPM or Scotia but the metal stayed put, they would have needed to put a Warrant on it and it would now be Registered

Either it doesn’t belong to a Bullion Bank, or Bullion Banks must also maintain Eligible inventory with Brinks despite having their own approved Warehouses (which seems unlikely)

(On the other hand I suppose we could put it about that this is either just Xi Jinping’s excess pocket money that he didn’t spend on UK infrastructure projects last week, or proof of Jesse’s assertion that most of the Eligible stocks are “spoken for” and held/traded solely on the basis of informal nods, winks and handshakes rather than legal contracts and binding obligations. After all, what is 10 tons of Gold between friends? Nudge nudge wink wink it doesn’t really exist so keep stacking’, Ponzi and “How’s yer Father?”)

http://goldchat.blogspot.com/ Bron Suchecki

I hadn’t looked at which warehouse, currently in Sydney for a conference next week. It is unlikely a bank would put metal into another vault, but it could be other bullion banks. Kilobars do exist in Comex NY warehouses but doesn’t seem to be that frequent. My theory is that bullion banks would ask North American refineries to make kilobars, park them in NY warehouse, go short to hedge, and then when demand and premiums in China rise, close out the short and ship to China.

Not so: all Chinese economic stats and PBOC Gold Reserves are ipso facto bogus (unless really bad, in which case I told you so and Tibet and Tiananmen Square)

Is there a possible distinction between Asia/CME 9999 Kilobars and “good” COMEX-100oz-eligible / LBMA / Dubai / India spec 995 Kilobars, such that they need to be held separately? see http://www.goldbarsworldwide.com/PDF/BI_1_GoldAssociations.pdf for the really confusing range of valid Kg fineness specifications across different Exchanges, and do we really believe that the Yanks are actually capable of refining to 9999 standard when all they seem able to manufacture is agricultural machinery such as Kim Kardashian’s ass, the Chevy Corvette and Harley Davidsons?

I am back in Guangdong before going to Singapore midweek: plenty of shiny things on the shelves in all the jewellery stores here, no queues though. VPNsRUs